I'm getting ready to finish my basement and one of the rooms is already roughed in. However, the stud walls are 1/2 (give or take) away from the concrete. My plan was to insulate with fiberglass but after reading found you should put XPS foam board as a vapor barrier/insulator. Do I HAVE to rip all of the framing out or is there a way to salvage what's been done?

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Much depends on the dryness of your basement. For most basements, worthy of being made into finished living space, 3 mil. plastic sheeting between the framing and basement wall should be sufficient for this already framed room. The seems can be stapled to the inside of stud bays.

I'm not a fan of fiberglass batt insulation in basements, due to potential mold and mice issues, and, therefore, prefer XPS; which you could use for the yet to be framed rooms.

Some might suggest foam board between the framing and drywall but I don't care for drywall to be hung on the required, longer drywall screw. I guess it depends on the thickness of the foam board one uses. A heated basement shouldn't require much additional insulation as long as the rim joists are well insulated.